Revoult lost more than $20 million due to payment disruptions
Date: 2023-07-11 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
Hackers stole £18 million (about $23 million) due to a failure in payments by fintech broker Revolut.
"Organized crime groups took advantage of the mistake, encouraging people to make expensive purchases, which were subsequently abandoned. Then they cashed out the money through ATMs, "the sources of the publication explained.
According to the publication, last year, attackers withdrew money for several months before they managed to find and close this loophole. However, the incident affected Revolut's corporate funds, not customer accounts.
The failure occurred due to the difference between the European and American payment systems. This meant that when certain transactions were rejected, Revolut mistakenly refunded the accounts, effectively handing them over its own money, the sources told the newspaper.
However, Revolut's systems failed to detect massive fraud – the problem came to light when a partner bank in the United States notified the fintech company that it had less cash than expected. The auditors also noticed that the revenues
Revolut may have been "substantially miskewed" as the broker failed to verify the transparency of about two-thirds of its 2021 revenues.
The loophole was eventually closed and closed by spring 2022. Now Revolut has returned some of the money, but is still left with a net loss of about £16 million (about $20.46 million).
Despite the problems with payment systems, last year the broker recorded an increase in income by 33%. Total revenue exceeded $1 billion, but revenue from cryptocurrency services, which make up a large part of Revolut's business, fell to 5-10% of the total. Now Revolut does not plan to attract new investments and is going to become a public company in the future.
At the same time, back in 2020, Revolut's capitalization soared to a record $5.5 billion, making the broker the most expensive fintech startup in Europe. This was made possible thanks to a large round of funding for Series D. As part of the round, key investor TCV invested $500 million in the startup.
